The 47th President vs. Black Homeownership: Policy Changes That Threaten Generational Wealth
- Oya at Kataba
- May 5
- 7 min read
In this Spotlight, you'll learn:
How the Black homeownership rate remains 30 percentage points below white homeownership despite pandemic-era gains
Why Black homeowners who purchased during the pandemic's artificially inflated market are now financially vulnerable
How restarting student loan collections disproportionately impacts Black homeowners, especially Black women
The ways Trump administration policies like Project 2025 target programs that help first-time and first-generation homebuyers
What options are available to Black homeowners currently caught in this financial double-bind
Steps you can take to protect your home investment in the current economic environment
For many Black Americans, the dream of homeownership represents more than just having a place to call their own, it's the primary path to building generational wealth in a system that has historically denied them access to other forms of capital accumulation.
But as the Trump administration settles into its second term, a series of policy changes threaten to slam this door of opportunity shut for millions of first-time homebuyers of color.
With Black homeownership rates hovering around 44% compared to 73% for white Americans, the racial homeownership gap stands at nearly 30 percentage points—a disparity that hasn't meaningfully improved since the Fair Housing Act was passed in 1968.
Now, rather than addressing this persistent inequity, the administration's housing agenda appears poised to exacerbate it through both direct housing policy changes and broader economic decisions.
The Pandemic Housing Trap: Echoes of the 2008 Crisis
The COVID-19 pandemic created a brief but significant window of opportunity for Black homeownership. During this period, young, high-income, and educated Black borrowers drove an increase in homeownership, with the Black homeownership rate increasing by 2 percentage points, outpacing white homeownership growth, which increased by just 1 percentage point.
This surge in Black homebuying presents disturbing parallels to the pre-2008 housing crisis. During the subprime boom, mortgage brokers disproportionately sold high-risk loans even to high-income Black and Hispanic buyers whose credit should have qualified them for traditional mortgages available to white homebuyers with similar incomes.
Today's situation mirrors this predatory pattern: Black and Latino millennials, after years of delayed homeownership compared to previous generations, finally started catching up during the pandemic. The share of Black homebuyers under 45 years old increased by 5.3 percentage points—more than any other demographic group. At the same time, over one-third (36%) of all pandemic-era homebuyers now believe they overpaid for their homes, with Black buyers particularly vulnerable to this market inflation.
As the housing supply shortage became acute during the pandemic, the market became more competitive, with many homebuyers induced by low interest rates. Households with high incomes and high educational attainment were more likely to access homeownership, with the share of loans made to borrowers with annual incomes above $75,000 increasing by nearly 4 percentage points.
The growth in the shares of Black and Latino borrowers with incomes above $75,000 outpaced that of white borrowers, but most high-income white households were already homeowners, which partially explains the smaller magnitude of growth.
This created a perfect storm that now threatens to become 2008 all over again:
First, the trap was set: The median U.S. home price soared approximately 45% from $289,000 five years ago to $418,000 in early 2025, forcing many Black first-time buyers to stretch their finances to the breaking point just to enter the market.
Then came the double-cross: The administration's decision to restart aggressive student loan collections on May 5, 2025 disproportionately targets these same homeowners. As researchers noted, "stimulus checks and the student loan payment pause helped folks save for down payments," with 9% of student loan borrowers putting savings from the pause toward buying a home.
Project 2025's Blueprint for Housing
Project 2025's housing blueprint calls for increasing mortgage insurance premiums while decreasing down payment assistance programs—two changes that disproportionately impact first-generation homebuyers, many of whom are Black Americans without the benefit of family wealth to draw upon.
The plan specifically targets resources designed to help first-time homebuyers access the market, proposing to:
Eliminate down payment assistance programs specifically benefiting first-generation homeowners
Increase mortgage insurance premiums, making monthly payments less affordable
Reorient HUD away from racial justice and fair housing priorities
Dismantle federal policies supporting affordable housing development
The Anti-DEI Agenda: Amplifying Housing Vulnerability
The administration's anti diversity, equity, and inclusion (DEI) initiatives directly compound the challenges facing Black homeowners who capitalized on pandemic-era opportunities.
Since January 2025, the White House has undertaken a systematic dismantling of diversity, equity, and inclusion programs that directly impacts these homeowners' economic stability.
In his first days in office, President Trump issued an executive order titled "Ending Illegal Discrimination and Restoring Merit-Based Opportunity" that ended longstanding affirmative action requirements for federal contractors. This executive order revoked initiatives dating back to 1965 that were designed to ensure equal opportunities for minorities in employment and housing.
The administration has also put all federal diversity, equity and inclusion staff on paid leave with plans for eventual termination, ending programs that could have provided support to struggling homeowners from marginalized communities.
These actions coincide with dramatic workforce cuts led by the Department of Government Efficiency (DOGE). The White House has directed federal agencies to dismiss "probationary" employees, resulting in what economists suggest could be one of the biggest job cuts in U.S. history. These cuts extend far beyond the Washington area, affecting federal employees across the country.
The government's actions have triggered a massive private sector retreat from DEI initiatives as well.
Major employers across the country are rapidly dismantling their diversity programs:
Amazon, Google, McDonald's, Meta, Target, and Walmart have all rolled back DEI efforts, with many citing the administration's executive orders as justification.
Target has concluded its "Racial Equity Action and Change initiatives" and stopped focusing on stocking products from minority-owned companies.
Goldman Sachs dropped its previously set five-year "aspirational hiring and representation goals" for diversity.
This corporate DEI rollback creates a particularly dangerous situation for Black professionals who secured higher-paying jobs during the diversity push that followed George Floyd's murder in 2020. Many companies expanded their diversity goals at that time, creating opportunities that helped Black Americans qualify for mortgages during the pandemic home-buying surge. Now, as these same companies retreat from these commitments, the job security of those employees is increasingly at risk.
The assault on DEI programs and workforce reductions creates multiple challenges for Black homeowners who purchased during the pandemic:
Job insecurity: Black federal employees are disproportionately affected by DOGE cuts, threatening mortgage payments
Private sector vulnerability: As companies abandon diversity goals, Black professionals face greater layoff risks
Diminished support systems: Elimination of DEI programs reduces access to housing counseling and assistance
Contracting discrimination: Rolling back affirmative action for federal contractors impacts Black-owned businesses and their employees' ability to maintain mortgages
Decreased economic mobility: Fewer advancement opportunities in a DEI-hostile job market makes it harder to manage increased housing and student loan costs
For Black professionals who secured higher-paying jobs during the 2020-2021 DEI push and used those positions to qualify for mortgages during the pandemic's low interest rates, this represents a perfect storm threatening their newly acquired homeownership status.
The Student Debt Crisis: A Second Front
Black women, already the demographic most burdened by student loan debt, face a particularly devastating impact. Black women are the most likely demographic to have student loan debt, with 43.4% of those who attended some college reporting a student loan balance, compared to just 24.1% of Hispanic women and 19.9% of white women.
The paradox is striking: Black women are simultaneously America's most educated demographic group and the group most burdened by student debt, with an average of $30,400 in debt by college graduation, compared with $22,000 for white women and $19,500 for white men.
The resumed collections authorize the Treasury Department to seize tax refunds, garnish wages up to 15% of disposable income, and reduce Social Security benefits for defaulted borrowers.
For Black homeowners who used pandemic-era relief to finally access homeownership, this creates an impossible financial burden:
Trapped in high-priced homes purchased during what is now revealed as an artificial bubble
Saddled with student debt that can now result in wage garnishment and tax refund seizures
Facing increasing costs due to new tariffs and inflation
Unable to refinance or sell in the current high interest rate environment without taking significant losses
Tariffs and Housing: The Hidden Connection
The administration's new tariff policies further compound the problem by increasing construction costs. As of April 2025, a 10% tariff has been imposed on all imports, with higher tariffs targeting many countries that supply building materials.
These tariffs increase the cost of home construction and renovation, making both new builds and existing home improvements more expensive. Combined with high interest rates, this pricing pressure places both buying and improving homes further out of reach for many Black Americans.
Resources and Solutions
Despite these challenges, several tools, as of now, remain available to Black homeowners struggling with the dual burden of inflated mortgages and restarted student loan payments:
Loan Modification Options: A loan modification can be a valuable tool for homeowners facing financial hardship by changing the terms of your existing mortgage to make payments more manageable. These modifications can include interest rate reductions, term extensions, and principal forbearance.
FHA-insured mortgages offer standalone loan modifications that can resolve outstanding payment arrearages by adding them to the principal loan balance and extending the term to 360 months at a fixed interest rate.
Forbearance Agreements: If you're experiencing temporary financial difficulty, mortgage forbearance allows you to pause or reduce mortgage payments during a short-term financial setback, though you'll ultimately be responsible for repaying the mortgage and missed payments.
Student Loan Management: Refinancing student loans with a private lender could potentially secure a lower interest rate and reduce monthly payments, though you would lose federal loan protections in the process.
For those who want to keep federal protections, explore income-driven repayment plans, apply for economic hardship deferments, check eligibility for Public Service Loan Forgiveness, or consider consolidating federal loans.
What's at Stake
The homeownership gap between Black and white Americans has widened to its largest in a decade, and the policies being enacted will only make this disparity worse.
The current administration is effectively punishing those who took advantage of a rare window of opportunity, pulling the financial rug out from under them after they've committed to decades of mortgage payments.
For Black communities, the stakes couldn't be higher. Homeownership remains the primary vehicle for wealth accumulation in America, and the current policies threaten to reverse the modest gains made during the pandemic. Each foreclosure represents not just the loss of a home, but the destruction of accumulated wealth that could have been passed down to future generations.
By accessing available resources and understanding their options, Black homeowners can navigate the current financial landscape while protecting their largest asset and continuing to build wealth through homeownership. But without significant policy changes, the road ahead will be challenging for those seeking to close the racial wealth gap through homeownership.
Comentários